Prescription needed for drugs bill
Despite attempts to cut the State’s drugs bill in recent years, it remains stubbornly high and we are paying eight to 24 times what our neighbours in Britain are charged. Here is my Medical Independent column from 28 March 2013
Despite much public and political attention, there is still no decent explanation as to why the Irish pay more for prescription drugs, sometimes more than 20 times what other similar high income countries pay. Neither is there any reasonable, official explanation for why generic drugs in Ireland can be as expensive and sometimes even dearer than branded drugs.
Common sense or public interest does not prevail when it comes to drug costs in Ireland. The drugs budget escalated hugely during the boom. Between 2000 and 2008, the public drug budget tripled.
These increases can be explained. First of all, we were starting from a low base. In 2005, Ireland’s expenditure on drugs was the lowest in the then EU 15. Our growing and ageing population are also contributory factors. The greatest reasons for the escalating drugs budget was probably the greater availability of newer, more expensive drugs and increased volumes of prescribing. Also influencing the drugs budget in the mid-noughties was the introduction of medical cards for all over 70-year-olds in 2001. Older people are the more likely to be prescribed more drugs and often more expensive drugs. The withdrawal of universal medical cards for over 70-year-olds in 2008 will help to reverse that particular factor.
Initial figures just released for 2011 show that €1.8 billion was spent on drugs through the various public drug schemes – for those on medical cards, the long term illness, the high tech and the drug payment schemes.
The price paid by Irish people is determined by ‘deals’ agreed every three years between the government and the Irish Pharmaceutical Health Care Association (IPHA), the organsiation representing pharmaceutical companies in Ireland. Since 2006, government has been trying to bring down the high cost paid by the Irish public through the State drugs bill and individually out of our pockets through these ‘deals’.
Recent agreements (in 2006, 2009 and 2012) have sought to target the cost of drugs at different points where high prices are paid – ex-factory, wholesale and retail. In 2009, the spend on the public drugs budget was just under €2 billion, whereas the 2011 spend on the same schemes was €1.8 billion. These totals do not include the 60 per cent of the population that pay €144 for drugs every month. However, the deals have had some effect of bringing down the drugs bill, given that there are increasing amounts of items prescribed to a growing, ageing population.
So why is it that, despite efforts to drive down the cost of the drugs, that the Irish drugs spend in 2010 was the highest in the EU – 34 per cent above the average? And how is that a Sunday Business Post survey comparing the prices of the top 10 generics drugs in March 2013 shows we pay between eight to 24 times what our English neighbours do? These are extraordinary findings, given that English drug prices are more expensive than most other comparable high income countries. The same survey also showed that the price differentials had increased since last August, loading an additional burden on Irish pockets.
These excessive drug costs in Ireland are a direct result of shoddy deals done by the Department of Health, on behalf of the government, with the pharmaceutical sector. The high generic prices are because the government allowed generic companies to charge up to 98 per cent of the original branded drug. This has now been cut to 90 per cent. But it’s still eight to 24 times higher than what the English pay.
The Health (Pricing and Supply of Medical Goods) Bill 2012, originally initiated by Mary Harney in 2010, is slowly weaving its way thro-ugh the Houses of the Oireachtas. When enacted, this Bill will allow for substituting drug ingredients with generic or cheaper medicines. It offers the best potential for reducing our high drug costs.
Health officials are currently in negotiation with generic producers, hopefully achieving a better deal on the generics front and the National Task Force on Prescribing and Dispensing has also been established which, if effective, should lead to more efficient and effective prescribing and dispensing.
The most recent IPHA deal signed off by Minister Reilly last October will yield only €190 million in savings over three years when the cost of new drugs is taken into account. While new drugs are most welcome to those who benefit from them, recent political decisions allowing the cancer drug ipilimumab and CF drug Kalydeco show that even €190 million in savings is optimistic.
There is a possibility that the effect of the 2012 Health Bill will override such populist decision making. Here’s hoping.